Star Diamond Corporation (DIAM) Earnings Call Transcript & Summary

Well, good morning, everyone, and welcome to the 2022 Annual General Meeting of the Shareholders of Star Diamond Corporation. My name is Ewan Mason, and I am the Independent Director and Chair of the Board of Directors of the corporation. In accordance with the bylaws of the corporation, I will assume the position of Chairman for this meeting. This year, the corporation is holding this meeting in a virtual-only format again via this live webcast. This format allows participants the ability to attend from virtually anywhere while also reducing the corporation's cost in the meetings carbon footprint. The following guidelines will assist greatly with orderly conduct of this virtual meeting, so please follow them. The registered shareholders and duly appointed proxy holders who have properly logged into the virtual meeting portal will be able to vote on each matter once the electronic balloting system has been opened. Once the voting system has been opened, these registered shareholders or duly appointed proxy holders, will receive a message on their virtual interface requesting them to register their votes. Please note that there will only be a certain amount of time allowed promoting to take place once the electronic balloting system has been opened. I would also like to note that registered shareholders and duly appointed proxy holders that have already submitted their proxy voting in advance of the meeting do not need to vote again during this webcast. Questions regarding procedural matters or directly related to the motions pertaining to the meeting can be submitted using the instant messaging service of the virtual interface. These questions will be addressed during the formal portion of the meeting. Questions not relating to procedural matters or motions pertaining to the meeting will not, however, be addressed during the formal portion of the meeting, but rather at the end. Before we begin the formal business of the meeting, I would like to take a moment to introduce the directors, nominees, executive officers and technical advisers who are in attendance on this webcast Ken MacNeill, President and CEO and Director; Larry Phillips, Independent Director; and Lisa Riley, Independent Director. We also have in attendance on this webcast Greg Shyluk, CFO; and George Read, Senior Technical Adviser. I would also like to, at this time, acknowledge and thank on behalf of the corporation and its shareholders, Harvey Bay, for his past 20-year service to the corporation. We wish him well in his retirement. And I would also like to welcome and acknowledge Larry Phillips who joined our Board in February of this year. Please note that this webcast may contain forward-looking statements or forward-looking information within the meaning of applicable securities laws and direct today's participants to the safe harbor statement on our website and in our public filings. I now propose to deal with the formal aspects of the meeting. To ensure that the meeting covers the required business in an efficient and timely manner, I have prearranged with the designated registered shareholders and proxy holders to move and second the motions of the business. This is in no way intended to discourage any comments or questions from other registered shareholders or proxy holders. So with the consent of this meeting, I asked Greg Shyluk, our CFO, to act as Secretary of the meeting. The first item of business will be the appointment of a scrutineer for the purposes of this meeting, I appoint Odyssey Trust Company to its representatives as scrutineers, to compute the votes of any polls taken at this meeting and to report thereon to me. The purpose of today's meeting was set out in the Management Information Circular of the corporation dated March 29, 2022, a notice calling this meeting, financial information circular and form of proxy were mailed to shareholders on or around April 18, 2022. Our transfer agent, Odyssey Trust has attested to the proper mailing of the notice calling this meeting. Proof of service of such mailing has been provided by Odyssey Trust, I direct that a copy of such proof of service be annexed to the minutes of this meeting. I will dispense with the reading of the notice of meeting copies of management information circular and other meeting materials, including the notice are available under the corporation's profile and on the SEDAR website. I have been advised that there are voting shares representing more than 5% of all outstanding voting shares of the corporation present, and therefore, a quorum of shareholders of the corporation is present and the meeting is properly called and duly constituted for the transaction of business. I have recruited the scrutineers' report, and I direct that their formal report be annexed to the minutes of this meeting as a schedule. I now declare that the meeting has been regularly called and is properly constituted for the transaction of business. As previously mentioned, voting today will be conducted by an electronic ballot. I will now take a moment to ask that the balloting system be open to registered shareholders and appointed proxy holders and remind everybody that if you've already voted, you don't need to vote now, if you do need to vote, press the vote -- the button. The polls are now open. All registered holders and proxy holders who have properly logged in with their control numbers or user name and wish to vote will be able to see on their screen, all of the motions being brought forward at this meeting. As a reminder, if a registered shareholder or appoint a proxy holder, as previously submitted to votes, again, you do not need to vote unless you wish to change your vote from the previous submission. I now present to the meeting the audited financial statements of the corporation for the year ended December 31, 2021, together with the report of the auditors thereon. Copies of such documents have been mailed to the shareholders who requested such statements, and it is not proposed to read them. These documents are also available at any time on the corporation's website and on SEDAR. We will now proceed with the election of directors. The Board has determined that 4 directors are to be elected. I will now receive nominations for the election of 4 directors for the ensuing year or until their successors are elected or appointed.

Mr. Chairman, my name is Amy Wong, and I am a duly appointed proxy holder of the corporation. I nominate for election as directors of the corporation, the nominees named in the March 29, 2022, Information Circular, namely, Kenneth MacNeill, Ewan Mason, Larry Phillips and Lisa Riley.

Thank you, Amy. As no additional nominations were received in accordance with the advanced notice provisions of the corporation's bylaws, no additional nominee's election to the Board of Directors will be considered. I would also like to note that the Board of Directors has adopted a majority voting policy stipulating that if the votes cast in favour of the election of a director nominee are exceeded by the number of the votes withheld for such nominee's election, then a director nominee will submit the resignation promptly after the meeting for the port's consideration. Please be aware that as a result of the majority voting policy withhold vote is effectively a vote against a director nominee. I will now ask for someone to move and second the motion to elect these nominated as Directors of Corporation.

Mr. Chairman, my name is Evan Hall, and I am a duly appointed proxy holder of the corporation. I move that Kenneth MacNeill, Ewan Mason, Larry Phillips and Lisa Riley, be elected as directors of the corporation for the ensuing year or until their successors are elected or appointed and that we now vote individually with respect to each such person.

Mr. Chairman, I second the motion.

Thank you, Evan and Amy. And unless there are any questions, we will move to the next item of business, which is the appointment of auditors. The Audit Committee of the Board of Directors of the corporation has approved, subject to shareholder confirmation, the appointment of KPMG LLP charter professional accountants, for appointment as the auditors of the corporation to hold office until the next Annual General Meeting of Shareholders at such remuneration as may be deterred by the Board of Directors. I ask for a motion in that regard, please.

Mr. Chairman, I nominate KPMG LLP, chartered professional accountants.

Mr. Chairman, I second the motion.

All right. Thanks, both of you. We will now provide registrant shareholders and a duty appointed proxy holders with another minute or so to complete their electronic ballots. Once the electronic balloting system closes, the voting pages will disappear, and votes will automatically be submitted in tally. As a reminder, if you're voting by electronic ballot today, please register your votes by accessing the voting page and selecting the for or withhold buttons next to the name of each proposed director and next to the resolution with respect to the appointment of KPMG LLP, chartered professional accountants as the corporation's auditors. We're just going to pause for a moment here. [Voting]

Okay. I've been advised by the scrutineers that the ballots and proxies deposited for the meeting have been voted in favor of all the resolutions. I would ask that the scrutineer compile the report regarding the results of voting on all business matters. Results will be published on SEDAR and by press release. So the formal items of the business as set out in the notice of meeting have now been dealt with. As there is no further formal business of the meeting, May I please have a motion to terminate the formal part of the meeting.

Mr. Chairman, I move the meeting be terminated.

Mr. Chairman, I second the motion.

Great. Thanks very much. So now we enter essentially the general part of the meeting. And this year, like last year, we really don't have a dog and pony show because so things are up in the air. But it would be appropriate to comment on the past year. We've had a great year. We have a resolution with our partner, Rio Tinto and RTEC, and they're doing some great work in the community with James Smith Cree Nation and other groups to move things along. They're also working very hard with their worldwide base of technologists to figure out how we move forward with this deposit. And so as we wait for their information. We are getting ready to start up what I would call a fireside chat program that we explained to all our shareholders and new shareholders just how terrific this asset is that the corporation has. So I would say in closing of my statement, thank you to all of our shareholders who bore with us over the past 2 years, it was a bit of a rough ride, but I am extremely encouraged by the work that Rio is doing. They have been very cooperative, and we are consulting with them on a daily basis on a number of areas and hope to have much more news out in the near term. So with that, I'm going to turn it over to questions.

I've got a couple of questions on my screen here, which I'm going to answer. But I would say to you, if you want to ask a question, please click on the message button. In previous years, I think people have had a hard time understanding how to ask a question. It's pretty simple. Just click on the button, and we'll be happy to answer them. So the first question I have is, will shareholders get to see the feasibility study once we get it from Rio Tinto. First of all, to my knowledge, there is no feasibility study underway, but should we get one We will, of course, release spend. It's not always required to have a feasibility study to move forward [Indiscernible] when the Rio Tinto, so I would say that's where we're at with that. Someone has also asked when are we going to see the diamond breakage report. So we said in Q1 that we were going to complete it by the end of Q1, and we did. We then submitted it to our partners, Rio Tinto for their review. And now we are having discussions with them about the findings. But what I can say to you is the findings are no different from previous breakout reports in reality. We know that both the LDD programs, the bulk program and the trench cutter program, broke diamonds, that is an unassailable fact. The question is how big are the diamonds down there that haven't been broken? And that's what we want to get at. And so that's what our team is focusing on and looking forward to a program that reveals that as we go forward. So to cut to the major, the diamond breakage report is really not that important anymore. What's important is how we move forward, extracting large diamonds. And we will, of course, release the breakage report once we were in agreement with Rio on it. At this juncture, I'm waiting for some more questions in front of me and I don't see me. So I'm just going to pause for a couple of minutes to make sure everyone gets a chance to log their question and then we'll come back and answer them as they show up. So just hang tight. Okay. Next question. What was the purpose of an increase in interest in the Buffalo Hills joint venture? Good question. Our partner wanted out. It's not a core business for them. Our interest in taking up their quickens pretty basic. It's a deposit that hasn't been terribly well explored. The pipes are close to surface. And we think in the future, there may be some more interest in going there having a look, certainly taking a bulk sample. But again, we don't know how we're going to proceed in that because we still have another partner, and we're not sure what their level of interest is. I'll wait to see if there's any more questions. And if not, I'll terminate the meeting. Further question, what is the time to get the remaining topics of interest? I believe that's referring to, I think, the 6 or 7 areas that we indicated earlier in the year, we're going to report on. The way this works is when we get set to release information, we have to confer with Rio Tinto, make sure they're on site with it. We're still waiting for some clarification on a number of areas. And indeed, we do have some press releases ready to go, and there's a little bit of back and forth there with respect to data analysis and comparing data. And so when you have the volume of data that we have, and the number of people that were involved in getting it and analyzing it, it gets to be somewhat time consuming to make sure everybody is on site. And of course, we have to be on site because the securities regulators. Hopefully, in the next couple of months, all that information will be out the door. Certainly, we expect to hear from Rio shortly about their plans going forward. Well, there are no more further questions. So with that, we will put the meeting, and we look forward to meeting with you in person next year. So once again, thanks for bearing with us, and I believe that we've got great things to come this year. Thanks very much.